The present invention relates generally to improved techniques for automating the reporting of mortgage loan delinquency status. More particularly, the invention relates to advantageous techniques for electronic transmission of mortgage delinquency information using a publicly accessible data transmission network such as the Internet.
Many real estate loans employ mortgage insurance in order to allow a borrower to purchase property using a lower down payment than would otherwise be required. A mortgage insurance policy is purchased to protect the mortgage servicing entity servicing the mortgage. If a borrower defaults on an insured loan and the default is followed by a covered event which causes a loss to the mortgage servicing entity, the mortgage servicing entity may submit to a mortgage insurer a claim for payment under the terms of the insurance policy. Events giving rise to a claim may include foreclosure and sale of the property. Other covered events include a deed in lieu of foreclosure, in which the borrower gives title to the property to the mortgage insurer in order to avoid foreclosure proceedings. Another covered event is be an approved short sale of the property, in which the servicer allows the borrower to sell the property for less than the amount owing.
In order to reduce the risk of loss, the typical mortgage insurer requires a mortgage servicing entity to report all loans which become delinquent. If a mortgage insurer learns that a loan is delinquent, it can help the servicing entity take steps to help the delinquent borrower avoid foreclosure, for example by contacting the borrower to find out why payment has not been made and by proposing ways in which the delinquency can be corrected. In cases in which it appears that the delinquency cannot be cured, learning of the delinquency helps the mortgage insurer act to mitigate potential losses. Such prompt action may reduce the time during which the property may deteriorate in condition and value due to neglect by the borrower and may reduce other expenses resulting from a delay in foreclosure of the mortgage. Prompt notice of a delinquency and appropriate action by the mortgage insurer may increase the amount recovered at a foreclosure sale, reducing losses on the mortgage insurance policy. Thus, timely reporting of delinquency helps to minimize losses due to defaults, and benefits mortgage insurers, servicing entities and borrowers.
Many servicing entities, especially those servicing a small or moderate number of loans, do not use specialized electronic equipment or software for submission of delinquency reports. Such servicing entities typically use paper documents to report delinquencies. These documents are submitted to the mortgage insurer and the mortgage insurer enters the data from the paper documents into an information management system. Such submission of delinquency reports using paper documents creates expense because the insurer must provide the labor needed to enter the information from the paper documents into the insurer's information management system. Moreover, transcription errors may occur as the mortgage insurer transfers the information into its system. Considerable expense could be saved, and errors prevented, by a system allowing servicing entities to report delinquencies to a mortgage insurer without a need for the servicing entity to use specialized software or equipment in order to report the delinquencies.